ECN 211 FINAL EXAM REVIEW SCRIPT 2026
QUESTIONS WITH SOLUTIONS GRADED A+
◉ Which of the following Fed actions would increase the money
supply? Answer: Buy bonds
◉ A soft drink cost $1.75 in 2019. The value for the CPI in 1965 is
60.2 and the value of the CPI for 2019 is 236.2, what is the price of a
soft drink in 1965 dollars? Answer: $0.45
◉ Refer to the figure. If the economy starts at Y, then W represents:
Answer: A recession
◉ The United Kingdom is an advanced economy, and over the past
century its rate of economic growth has been higher than that of the
United States. Answer: False
◉ If candles and candlesticks are complements, then which of the
following would increase the demand for candles? Answer: A
decrease in the price of candlesticks.
◉ Refer to the figure. If the production possibilities frontiers shown
are each for one day of production, then which of the following
,combinations of tacos and burritos are Adam and Deirdre together
unable to produce in a given day? (you'll have to look the image up
on the internet) Answer: 700 tacos, 150 burritos.
◉ Which of the following is NOT an automatic stabilizer? Answer:
An increase in money supply.
◉ Monica has $500 to spend and wants to buy either a new
snowboard or a new laptop. Both the snowboard and the laptop cost
around $500, so she can only buy one. This illustrates the basic
concept that: Answer: People face trade-offs
◉ Gross Domestic Product (GDP) Answer: Includes the value of
government services but not the value of services provided by major
household appliances purchased in a previous period.
◉ Tax increases shift aggregate demand curve to the: Answer: Left.
While increases in government spending shift the aggregate demand
curve to the right.
◉ Positive statements are NOT: Answer: Prescriptive
◉ Refer to the Table. Suppose the government imposes a price floor
of $5 on this market. What will be the size of the surplus in this
market? Answer: 12 units
, ◉ Which of the following did NOT occur in the housing and financial
crisis? Answer: Shift of the long run Phillips curve to the left.
◉ The Fed changes the discount rate and, as a direct result, reserves
have increased. The Fed has most likely: Answer: Decreased the
discount rate.
◉ Suppose Jessica can wash six windows per hour or she can iron
twelve shirts per hour. Peter can wash four windows per hour or he
can iron ten shirts per hour. Which of the following is not true?
Answer: Peter has an absolute advantage over Jessica in ironing
shirts.
◉ When deciding how much to save, people care most about before-
tax nominal interest rates. Answer: True
◉ Frictional unemployment is caused by: Answer: A job search and
sectoral shifts.
◉ Refer to the Table. If the price were $80, a(n): Answer: Surplus of
35 units would exist, and price would tend to fall.
◉ Refer to the Table. Suppose the government imposes a price
ceiling of $2 on this market. What will be the size of the shortage in
QUESTIONS WITH SOLUTIONS GRADED A+
◉ Which of the following Fed actions would increase the money
supply? Answer: Buy bonds
◉ A soft drink cost $1.75 in 2019. The value for the CPI in 1965 is
60.2 and the value of the CPI for 2019 is 236.2, what is the price of a
soft drink in 1965 dollars? Answer: $0.45
◉ Refer to the figure. If the economy starts at Y, then W represents:
Answer: A recession
◉ The United Kingdom is an advanced economy, and over the past
century its rate of economic growth has been higher than that of the
United States. Answer: False
◉ If candles and candlesticks are complements, then which of the
following would increase the demand for candles? Answer: A
decrease in the price of candlesticks.
◉ Refer to the figure. If the production possibilities frontiers shown
are each for one day of production, then which of the following
,combinations of tacos and burritos are Adam and Deirdre together
unable to produce in a given day? (you'll have to look the image up
on the internet) Answer: 700 tacos, 150 burritos.
◉ Which of the following is NOT an automatic stabilizer? Answer:
An increase in money supply.
◉ Monica has $500 to spend and wants to buy either a new
snowboard or a new laptop. Both the snowboard and the laptop cost
around $500, so she can only buy one. This illustrates the basic
concept that: Answer: People face trade-offs
◉ Gross Domestic Product (GDP) Answer: Includes the value of
government services but not the value of services provided by major
household appliances purchased in a previous period.
◉ Tax increases shift aggregate demand curve to the: Answer: Left.
While increases in government spending shift the aggregate demand
curve to the right.
◉ Positive statements are NOT: Answer: Prescriptive
◉ Refer to the Table. Suppose the government imposes a price floor
of $5 on this market. What will be the size of the surplus in this
market? Answer: 12 units
, ◉ Which of the following did NOT occur in the housing and financial
crisis? Answer: Shift of the long run Phillips curve to the left.
◉ The Fed changes the discount rate and, as a direct result, reserves
have increased. The Fed has most likely: Answer: Decreased the
discount rate.
◉ Suppose Jessica can wash six windows per hour or she can iron
twelve shirts per hour. Peter can wash four windows per hour or he
can iron ten shirts per hour. Which of the following is not true?
Answer: Peter has an absolute advantage over Jessica in ironing
shirts.
◉ When deciding how much to save, people care most about before-
tax nominal interest rates. Answer: True
◉ Frictional unemployment is caused by: Answer: A job search and
sectoral shifts.
◉ Refer to the Table. If the price were $80, a(n): Answer: Surplus of
35 units would exist, and price would tend to fall.
◉ Refer to the Table. Suppose the government imposes a price
ceiling of $2 on this market. What will be the size of the shortage in
